Crude oil market remains volatile and constrained

Following three consecutive sessions of declining, crude oil prices have been pushed to their lowest levels of the year this week, with both WTI and Brent futures plummeting more than $1 per barrel the prior day, hitting 15-month lows. Crude oil prices have recently recovered after it was reported that Saudi Arabia and Russia held talks to explore boosting energy market stability. Although concerns over the economic slowdown caused by the banking crisis continued to dampen the prices.

According to the official Saudi media, the Russian deputy prime minister and the Saudi energy minister met in the Saudi capital to discuss OPEC+ efforts to balance the markets. These efforts will continue in accordance with the OPEC+ agreement reached in October last year to reduce production targets by 2 million barrels per day until the end of 2023.

The dollar fell on Thursday, making buying oil in dollars cheaper for overseas purchasers, which has bolstered oil demand marginally. Although the European Central Bank's (ECB) recent decision to raise interest rates by another 50 basis points will be another factor affecting oil prices, as well as the risk of ramifications in the banking sector, which is still causing investors to fear a global recession that would result in a decrease in overall oil demand, the latest oil price has been pushed by a broad recovery in financial markets following Credit Suisse's aid from Swiss authorities and US Treasury Secretary Janet Yellen, who has promised that the US banking system stays robust.

Furthermore, OPEC and the International Energy Agency (IEA) have anticipated increased oil demand in the coming weeks as a result of China's economic rebound, which is expected to drive crude oil demand to record highs this year. Concerns over oversupply, on the other hand, continue to weigh heavily on the market. In February, crude inventories in the developed world (OECD) reached an 18-month high. Meanwhile, US crude oil inventories have increased more than predicted, raising fears about decreasing demand in the world's top oil consumer, while Russian production has remained constant despite the possibility of greater supply cuts in the future. As a result, the price of crude oil is highly volatile in relation to the global financial market at this time, with important factors influencing the price continuing to be the direction of monetary policy from the US and measures to assist and prevent the spread of the banking crisis, including demand from China.

Data for Technical Analysis (5H)

Resistance : 75.24, 75.42, 75.72

Support : 74.64, 74.46, 74.16                   

5H Outlook

1H Outlook

Source: Investing.com                          

Buy/Long 1 If the support at the price range 74.56 - 74.64 is touched, but the support at 74.64 cannot be broken, the TP may be set around 75.35 and the SL around 74.53, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 75.24 - 75.32, TP may be set around 75.60 and SL around 74.61, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 75.24 - 75.32 is touched, but the resistance at 75.24 cannot be broken, the TP may be set around 74.66 and the SL around 75.35, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 74.56 - 74.64, TP may be set around 74.35 and SL around 75.27, or up to the risk appetite.       

Pivot Points Mar 17, 2023 04:02AM GMT

Sources: Investing 1, Investing 2